labor relations and the law in south korea - sign in...

Copyrght 0 1998 Pacific Rim Law & Policy Association

LABOR RELATIONS AND THE LAW IN SOUTH KOREA

Laura Watson

Abstract: Tis Comment looks at labor legislation's role in shaping the present state

of labor relations in South Korea A brief history of the government's symbiotic relationshipwith business serves as a backdrop for assessing the current laws. The laws have anemployer bias accenluated by the broad administrative oversighit government has over laborrelations. More troublesome provisions of the laws are considered in detail. This Commentthen turns to recent pro-labor changes in the laws but discusses why labor unions areunlikely to achieve full equality in labor relations at this juncture. In conclusion, thisComment makes suggestions for change based on the premise that labor negotiations shouldbe conducted by the parties on an equal footing.

I. INTRODUCTION

South Korea represents a modem miracle of rapid industrialization andunprecedented economic growth.' However, not all South Korean citizenshave fully enjoyed the fruits of the nation's economic success. South Koreanemployees work under repressive labor standards2 and, historically, laborunions have been subdued by government and business.3 At the beginning ofthe nation's economic growth, the South Korean government embarked uponan economic course that promoted certain key businesses but resulted in therepression of budding labor unions.4 Perhaps repression of unions didcontribute to the rapidity of South Korea's economic growth, but now thatSouth Korea is snug in its position as the eleventh largest economy in theworld,5 further repression does not seem justified. Nonetheless, the State hasbeen reluctant to revise its pro-business labor laws because of its symbioticrelationship with the business community.6 The nexus forged between

1 See generally EZRA F. VOGEL, THE FOUR LrrrLE DRAGONS (1991). See also HANS UNNEMANN ET

AL., EXPORT-ORIENTED INDUSTRIALIZATION IN DEVELOPING COUNTRIES 318-29 (1987).2 See generally HUMAN RIGHTS WATCH, RETREAT FROM REFORM: LABOR RIGHTS AND FREEDOM OF

EXPREssION IN SOUTH KOREA (1990); Richard Dicker, South Korea Labor Rights Violations Under

Democratic Rule, 14 UCLA PAC. BASIN L.J. 196 (1996).See generally JANG JIP CHOI, LABOR AND THE AUTHORITARIAN STATE: LABOR UNIONS IN SOUTH

KOREAN MANUFACTURING INDUSTRIES, 1961-1980 (1989); GEORGE E. OGLE, SOUTH KOREA: DISSENT

WITHIN THE ECONOMIC MIRACLE (1990).4 Young-bum Parc, State Regulation, the Labour Market and Economic Development: The

Republic of Korea, in WORKERS, INSTITUTIONS AND ECONOMIC GROWTH IN ASIA 149-76 (Gerry Rodgers

ed., 1994).5 Michael Schuman, International: OECD Invitation Gives South Korea an Incentive to Tune Up

Its Economy, WALL ST. J., Oct. 14, 1996, at A15.6 See discussion infra Section I.

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business and government during the period of industrialization represents thegreatest obstacle to meaningful change in the present labor legislation. Byamending the laws to accord unions greater rights, the State must contendwith the danger of biting the hand that feeds it.

This Comment first considers the nature and history of the business-government nexus and how labor repression was a logical outgrowth of thisnexus. It then discusses the three relevant labor laws, the Labor Union Act;7

the Labor Dispute Mediation Act;8 and the Labor and Management CouncilAct.9 This Comment will demonstrate how these statutes provide forextensive administrative oversight of labor relations. The administration hasused the letter of the law to considerably manipulate union formation and givebusiness a marked edge in labor relations. As long as the business-government nexus continues to exist, any law providing for broadadministrative oversight will result in repression of labor activism. In light ofthis thesis, this Comment concludes by suggesting potential amendments forSouth Korea's labor laws based on the notion that significant changes must beimplemented to insure that South Korean workers enjoy the same rights tofreedom of association and collective bargaining taken for granted by workersin many other industrialized countries.

II. KOREA INCORPORATED

South Korea (hereinafter Korea) can be described as a "corporatiststate."'1 Corporatism must be distinguished from pluralism, the style ofgovernment typically associated with democracies. In a pluralistic state, lawand policy result from pressures placed on a passive government by variousinterest groups.1 In contrast, a corporatist government selects a set ofpolicies then uses its citizens and entities as instruments to effectuate thesepolicies. 12 Thus, the government in a corporatist state is highlyinterventionist. It chooses goals and then uses its citizenry to implementthem.

7 NODONG CHOHAPP6P [Labor Union Act] (1997) [hereinafter Labor Union Act].a NODONGCHAENGUI CHOCHONGP6P [Labor Dispute Mediation Act] (1987) [hereinafter Labor

Dispute Mediation Act].9 NOSAHY6PUtHOEPIP [Labor-Management Council Act] (1987) [hereinafter Labor-Managemnent

Council Act].10 CHO,supra note 3,at 11." Id. at 5-6.12 Id.

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Following the Korean War, the corporatist Korean government optedto transform its agrarian economy into an industrial one. 13 The Stateaggressively pursued export-oriented industrialization by stronglyencouraging the development of labor-intensive manufacturing industries. 14

Huge conglomerates, called "chaebols," arose during this period. 15 Thegovernment, which owned and controlled the banks, inspired the formation ofchaebols by subsidizing them through preferential credit, low-interest loans,and tax incentives. 16 The State also kept wages relatively low by directlyengaging in wage setting.17

A business-government nexus was forged by the State's activeintervention in business matters. Government "rewarded" entrepreneurs whocomplied with its policies by publicly honoring them and, of course,permitting them to become wealthy.' 8 In return, the government receivedlegitimacy and political support from the chaebols.' 9 During the early yearsof industrialization, the chaebols were primarily instruments of state power.The State dominated the direction of industrialization and chaebols werecompelled to comply or lose their preferential economic treatment.20

However, as chaebols' economic prominence increased, the puppet-masterrelationship transformed into a relationship based on mutual dependence.2'Chaebols now exert considerable political influence, especially those thathave a highly collaborative relationship with the state.22

The State's collusion with business has led to severe repression ofworkers' rights to organize and engage in collective action.23 The State hadtwin motives in repressing these rights. First, suppression of unions helped

13 LINNEMANN ET AL., supra note 1, at 319.14 Id. at 319-23.15 VOGEL, supra note 1, at 61.16 id.17 See Taigi Kim, Human Resource Management for Production Workers in Large Korean

Manufacturing Enterprises, in INDUSTRIALIZATION AND LABOR RELATIONS 216, 220 (Stephen Frenkel &JeffreyHarrod eds., 1995). See also Park, supra note4, at 156-58.

I' CARTER J. ECKERT ET AL., KOREA OLD AND NEW: A HISTORY 405 (1990).19 See Richard F. Donor & Gary Hawes, The Political Economy of Growth in Southeast and

Northeast Asia, in THE CHANGING PoLITcAL EcONOMY OF THE THIRD WORLD 145, 155 (MaIochehr Dorrajed., 1995). The Korean government has always needed the appearance of legitimacy because, until 1987, it

was an authoritarian regime. ECKERT ET AL., supra note 18, at 347-87. The first democratic election was heldin 1987, but Korea is still trying to shake off its authoritarian past. Id.

20 LINNEMANN ET AL., supra note 1, at 322-23.21 See CHOI, supra note 3, at 208.22 Id. at 98.23 This is true despite the fact that, in Korea, these rights have attained constitutional status.

HANKUKH6NP6P [KOREA CONST.] art. 33(1) ('To enhance working conditions, workers shall have the right toindependent association, collective bargaining and collective action.").

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insure that industrial strife would not hamper the State's goal of pursuingexport-led production.2 4 Secondly, the State enriched its symbioticrelationship with the business community by using its police power tomaintain workplace order.25 For labor advocates, this latter motive may bemuch more disturbing. Because Korea has already achieved economicsuccess, suppression of unions is no longer necessary as an end in itself.However, by subduing workers to placate employers, the government hascreated an environment where business has never had to seriously deal withunions.2 6 Since most employers probably expect that favoritism in laborrelations will continue, if the government makes significant legislativeconcessions to labor unions, business is likely to resist these changes.2 7

Consequently, the State may have to separate itself from corporate influencesbefore it can institute changes that accord workers full rights.

Repression of labor has been both direct and indirect. The latter typeof repression arises from the labor laws themselves and is discussed in thenext section. The more direct forms of repression also deserve comment todemonstrate the present essence of labor relations. Some of the morenotorious tactics utilized by the government have included brutal policeintervention during strikes,2" widespread arrests of union members, 29 andkidnappings followed by brainwashing at so-called "purification camps." 30

Even when the State's intervention is not direct, it implicitlyencourages employers to use self-help to deter union activity. For example,employers are permitted to hire management thugs called kusadae to threatenand assault union organizers.3 1 The government has also aided employers bycompiling black lists identifying employee troublemakers.32 Additionally, thegovernment attempts to incite public disapprobation for union activities byblaming unions for any economic downturn experienced by the nation as awhole and concomitantly presenting union members as selfish and

24 Park supra note4, at 152.

25 OGLE, supra note 3, at 59-61.26 See Jong-il You, Labour Institutions and Economic Development in the Republic of Korea, in

WORKERS, INSTITUTIONS AND ECONOMIC GROWTH IN ASIA, 177, 205 (Gerry Rodgers ed., 1994).27 The government has made moderate amendments to its labor laws in the past few years. Employers'

resistance to the laws have resulted in a high level of conflict. Id.2 OGLE, supra note 3, at 60.29 Dicker, supra note 2, at 208.o OGLE, supra note 3, at 55.31 Id. at 61-62. Kusadae means "Save Our Company Group."32 Hagen Koo, The State, Minjung and the Working Class in South Korea, in STATE AND SOCIETY IN

CONTEMPORARY KOREA 131, 148 (HagenKoo ed., 1989).

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individualistic.33 Although kidnappings and purification camps seem to be aremnant of Korea's authoritarian past, violent strikebreaking, arrests, andscapegoating of unions persist in modem Korea.34 Any thorough examinationof Korea's present labor relations must be conducted against this backdrop ofovert, extralegal discouragement of union membership and activity.

IH. RELEVANT LABOR LAWS

Facially, Korea's labor laws do not appear particularly biased againstunions. In fact, the initial Labor Union Act passed in 1953 resembled theUnited States' pro-labor Wagner Act of 1935. 35 However, the laws must beunderstood within their proper context. Prosecutorial discretion and selectiveenforcement have been continuous problems. 36 In addition to theseadministrative shortcomings, the laws themselves reflect a pattern of laborrepression and pro-employer state policy.

A. The Labor Union Act

The Labor Union Act provides for extensive administrativeoversight of every stage of union activity. In order to be recognized as theemployees' bargaining representative, the union must report to theadministrative authority and submit information including union title,location of its office, number of members, names and addresses ofofficers, and the title of its federation. 37 Any changes in this informationmust be submitted to the administrative authority within fifteen days. 8

33 HUMAN RIGHTS WATCH, supra note 2, at 29-30. See also CHOI, supra note 3, at 13 (discussinggovernment's attempt to instill its brand of work ethics in employees).

,, During a three week period of intense labor unrest following passage of a pro-businss law inDecember 1996, the government rather unsuccessfully attempted to use all three of these tactics. Police armedwith tear gas were used to break up demonstrations. Ju-Yeon Kim, Korean Protests Mushrooming IntoPolitical Crisis, WASH. POST, Jan. 12, 1997, at A28. Prosecutors issued arrests for several union officials andPresident Kim Young Sam asked the nation, "If business fails, where will the workers be? You nmst letbusinesses live .... Those with whom the workers and firms should be competing with are their foreigncounterparts." David Holley, S. Korean Strikes in Crucial Phase, Analysts Say Asia: President KimRejects Unions' Demands to Scrap New Law Making it Easier to Lay Off Workers, L.A. TIMES, Jan- 7,1997, at A12.

" CHOL supra note 3, at 85. Labor Union Act, supra note 7. 25 U.S.C. §§ 151-69 (1996).36 Hwang-Joe Kim, The Korean Union Movement in Transition, in ORGANIZED LABOR IN THE ASIA-

PACIFIC REGION 133, 148 (Stephen Frenkel, ed. 1993) (although the law prohibits unfair labor practices,employers have been able to commit them with "virtual impunity").

37 Labor Union Act, supra note 7, art. 13(1).39 id.

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The administrative authority is defined as the mayor of Seoul, the mayorof the situs of the workplace, or the provincial governor.39 With theexception of the mayor of Seoul, these officials are presidential appointeesrather than elected representatives.4 0 Thus, members of the electoratehave no ability to directly influence the administrative authorities by usingthe franchise to eject administrators who make biased decisions or toattempt to elect candidates who represent their interests.

An administrative authority has three options when it receives anapplication for recognition from a union.41 First, it can recognize theunion; second, it can refuse to recognize the union; or third, it can delayrecognition until the union completes a request for more thoroughinformation. Often, "the routine decision to recognize a union is adisguised political decision." '4 2 When an administrator postponesrecognition, it usually "warns" the employer of the employees' organizingattempts thereby giving the employer an opportunity to use self-help tobreak up the union before it is officially recognized.43 The delaying tactichas also contributed to the widespread problem of company unions.Because multiple unions per shop are basically prohibited,44 once theemployer is warned of imminent unionization, it can quickly register afaux union while the real organizers attempt to comply with the law'scumbersome requirements.45

Once a union is certified, administrative oversight does not cease.Unions are required to enact by-laws4 6 and submit them to theadministrative authority.4 7 The administrator then interprets the by-lawsand has power to make unilateral amendments with permission of the laborcommittee if it determines that the laws "conflict with laws and

39 id.

40 HUMAN RIGHTS WATCH, supra note 2, at 111.4' Labor Union Actsupra note 7, art. 12 (Supp. 1997).42 CHOI, supra note 3, at 103.43 Id. at 102.44 Labor Union Act, supra note 7, art. 5(1) (Supp. 1997). Despite the ban on multiple unions, workers

recently achieved a significant victory when the government agreed to officially recognize the formerly illegalKorean Confederation of Trade Unions as an alternative to the much me moderate Federation of KoreanTrade Unions ("FKTU"). Michael Schuman & In Kyung Kim, South Korea Passes Watered-Down LaborLegislation, WALL ST. J., Mar. 11, 1997, at A19. The FKTU was initially a sham union set up by thegovernment and, hence, many workers question whether it really advances their interests. See OGLE, supranote3, at 12-13.

45 OGLE, supra note 3, at 58-59.46 Labor Union Actsupra note 7, art. 14 (Supp. 1997).47 Id. art. 13.

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regulations relating to labor." 48 The union must also keep extensiverecords49 that are subject to inspection at any time by the administrativeauthority.50 This unlimited right to inspect union records is especiallysignificant because the administrator is given concomitant authority tounilaterally abrogate or modify any resolution or measure taken by theunion if it "conflicts with laws and regulations related to labor or the by-laws .. ,,.l Additionally, unions' financial records are audited every sixmonths, or more frequently at the discretion of the auditor.52 Employers'documents and records pertaining to labor relations do not seem to besimilarly scrutinized.

The administrative authority also has ultimate veto power over theterms of a collective bargaining agreement. The employer and union mustsubmit their agreement to the administrator within fifteen days of itsexecution.5 3 Pursuant to a resolution of the labor committee, theadministrator may change or cancel terms that it deems "illegal orunjustifiable."54 Since the State has previously capped wages, any termproviding for greater wages than those set by the State would beinvalidated as illegal. Under the statute, the term does not need to beillegal to be rendered void; "unjustifiable" agreement provisions may alsobe struck. 55 "Unjustifiable" does not describe a precise standard and anadministrative authority could presumably determine for himself whichprovisions are "unjustified."

B. The Labor Dispute Mediation Act

Considering the government's extensive control over the substantiveterms of agreements, one should not be surprised to learn that the collectivebargaining process has not led to concrete changes in the workplace. With theState backing it up, the employer has little incentive to earnestly face theunion across the bargaining table. Thus, workplace gains have generally not

I d. art. 12.49 Id. art. 14.'0 Id. art. 13(2).

"' Id art. 21. The legislature has essentially given the adrninistrators superior authority to interpret andapply the unon's own by-laws by perrniting the administrators to define when a union's activities contraveneits laws.

2 Id. art. 25.SId. art. 31(2).

14 Id. art. 31(3).55 Id.

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arisen from collective bargaining but rather from industrial action followed bynegotiations.5 6 Since strikes and demonstrations have traditionally been theonly means for unions to achieve real gains, Korean unionists have earned areputation for being extremely militant.57 However, the government has thecapacity to counteract unions' disruptive industrial actions by interveningthrough the Labor Dispute Mediation Act.

Under the Act, a union must disclose its intention to strike to theemployer, the labor committee, and the administrative authority.58 Afterdisclosure, the union is required to "cool off" for ten days before institutingthe strike.5 9 Thus, unions are legally precluded from exerting economicpressure by "springing" strikes on employers. During the ten-day interim, theemployer may plan retaliatory measures although the employer is not legallypermitted to lock out its workers until they have officially struck.60 Theadministrative authority has broad statutory authority to suspend acts ofdispute that constitute "acts of violence or subversion'61 or an act that"suspends, discontinues or obstructs the normal maintenance and operation offacilities installed for safety protection at factories, workplaces or any otherplaces of work... ..6 2 Presumably, the administrative authority could whollyprevent a certain industrial action by declaring it illegal within ten days afterthe union discloses its intention to engage in the action.

The Act mainly focuses on resolving disputes once they have arisen.Although the employer and union can agree to utilize their own disputeresolution mechanisms, 63 the government generally plays a central role indispute resolution. The statute provides for a two-step cooperative process.First, the parties to the dispute will attempt conciliation.64 The conciliator ischosen by the labor committee 65 and has authority to compel production of

56 Kim, supra note 36, at 154.51 See South Korea: Not So Militant, ECONOMIST, June 10, 1995, at 35 (discussing the illegal

activities of a "dissidern" unrecognized labor organization and the approximately 3500 "illegal" strikes in1987). See also John Burton, News: Asia Pacific: South Korea Faces Bout of Labour Unrest, FIN. TIMES,June 20, 1996, at 4 (outlining the militant activities of the Korean Confederation of Trade Unions to demandrecognition).

58 Labor Dispute Mediation Act, supra note8, art. 16.'9 Id. art. 14.60 Id. art. 17.61 Id. art. 13(1).62 Id. art. 13(2).63 Id.

6 Id. arts. 18-21.65 Id. art. 18(l)-(2). The labor committee first prepares a list of possible conciliators then chooses from

among the names on its list in the event of a dispute.

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witnesses or evidence. 66 If conciliation is unsuccessful, the dispute proceedsto mediation. 67 A three-person mediation panel hears the parties' arguments68

then issues a written recommendation to the parties.69 The recommendationbecomes binding if the parties accept it.70 The labor committee can orderbinding arbitration in lieu of conciliation and mediation if the dispute involvesa public utility, both parties request arbitration, or one party requestsarbitration pursuant to the terms of a collective bargaining agreement.71

Korea's dispute resolution machinery seems just and workable and,indeed, it would be just if the State were neutral like the statutory schemesuggests. However, because the State is in collusion with business, unionsare disadvantaged when the State intervenes in disputes. The Act'sprovisions on emergency mediation best illustrate the potential for abuse. TheMinister of Labor has discretion to order mediation if "acts of dispute arerelated to a business of public interest, or it is of such scope or character thatthere exists a danger which might substantially impair the nation's economyor endanger the daily life of the general public." 72 Once emergency mediationis ordered, both parties must suspend all acts of dispute.73

If the Labor Committee determines that mediation "is unlikely to beobtained," it will order binding arbitration. 74 Both mediation and arbitrationare conducted by the Labor Committee. 75 Thus, once the Minister of Labordecides that an emergency exists, he can force the union to submit a disputeto a panel of arbitrators likely to be biased in favor of the union's opponent.The broad definition of "emergency" means that several industrial disputesmay be channeled to arbitration under the emergency mediation provisions ofthe Act. Historically, compulsory arbitration has negatively impacted wagesand working conditions.76 Unions perceive mandated dispute resolution as "agovernment device to suppress the labor movement." 77 Thus, forcing a unionto arbitrate over a strike may effectively stymie the union's attempts to obtainbetter working conditions. Of course, the union may decide to ignore the

SId. art. 19.67 Id. arts. 20, 22.

8 Id. arts. 23(2), 26.69 Id. art. 28.70 Id. art. 29."1 Id. art. 30.72 Id. art. 40.73 Id. W.41.74 Id. art. 43." Id. arts. 42, 44.76 See CHoI, supra note 3, at 272.77 Seoul Threatens to Act on Planned Strikes, AslAN WALL ST. J., June 20, 1996, at 4.

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government's order and continue striking once emergency mediation isdecreed. However, this may be risky because when a union does not complywith an order of emergency mediation, or any other section of the Act, it istechnically breaking the law and the State is legally justified in using policeforce to break up these "illegal" strikes and arrest participants.

C. Labor Management Council Act

The Labor Management Council Act requires employers with greaterthan a certain number of employees to set up intraoffice consultationcommittees.78 These committees must have an equal number of employeeand employer representatives 79 and must consult about productivity, workers'welfare, prevention of labor disputes, procedures for resolving employeegrievances, safety and health concerns, personnel matters, and "[o]thermatters concerning labor-management cooperation. 80 The employer is alsorequired to set up a grievance committee for the processing of employeecomplaints. 8' The language of the Act is deliberatively non-preemptive ofcollective bargaining agreements82 and in unionized workplaces, employeerepresentatives sitting on the council must also be union members.8 3

Despite its non-preemptive language, the Act has significantlyundermined the collective bargaining process. This is partially becauseemployers prefer to "consult" with employees rather than bargain with theunion.8 In fact, the government passed the Act with the intention ofeventually replacing unions with labor-management councils. 85 There is noevidence to suggest that labor-management councils actually improve labor-management relations. For example, productivity committees have beentotally ineffective because management does not value employee input andworkers are basically disinterested in participating.8 6 Because many issuesare subject to "consultation," including industrial disputes,8 7 the operation of

7S Labor-Management Council Act, supra note 9, art. 4(1). Presently, an employer with 50 or more

employees must set up a council. OECD Economic Surveys, 1995-1996, Korea, at 104, OECD (1996).79 Labor-Management Council Act, supra note 9, art. 6(1).'o Id. art. 20.s" Id. arts. 24-26.

8' Id. art. 5." Id. art. 6(2).84 Kim, supra note 36, at 148.85 You, supra note 26, at 184.86 Kim, supra note 17, at 230-31.87 FREDERIC C. DEYO, BENEATH THE MIRACLE: LABOR SUBORDINATION IN THE NEW ASIAN

INDUSTRILISM 137 (1989).

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the current Act denies employees the opportunity, to choose a strongrepresentative that can proficiently defend employee interests againstmanagement decisions. Thus, even though labor-management councils mightbe positive innovations in many countries, they cannot be used to advanceemployee interests in environments where workers have traditionally beensilenced and mistreated.

IV. MODERN STATUS OF KOREAN LABOR RELATIONS

As long as the government-business nexus persists, laws providing forbroad administrative oversight of labor relations will result in laborrepression. Until recently, unions lacked the capacity to affect laborlegislation through political channels because they were precluded fromengaging in any political activity, including campaign funding.8 9 In the Springof 1997, the ban on political activity by unions was lifted.90 Now unions candirectly influence the political process by publicly and financially supportinglabor-friendly political candidates. However, the symbiotic relationshipbetween government and business continues to be a formidable obstacle.Thus far, union pressure alone has not sufficed to alter the basic elements ofKorean labor relations. As this portion of the Comment discusses,international pressure has been a major factor in forcing the Koreangovernment to rethink its stance. Continuing international pressure combinedwith unions' increased political capacity could potentially result in genuinechange to the nation's labor legislation.

A. Unions and Political Influence

Throughout Korea's post-war history, labor unions have beenpolitically weak.9' The truism, "he who has access has influence, 92 isparticularly apt to describe Korean labor relations; employers have been able

3 See COMMISSION ON THE FuTuRE OF WORKER-MANAGEMENT RELATIONS, FAcT FINDING REPORT29-57 (1994) (considering the feasibility of worker-cmployer commaittees in United States' workplaces with abrief discussion of these committees in Europe).

s9 Labor Union Act, supra note 7, art. 12 (repealed 1997). Workers still may not form unions for theprimary purpose of furthering political goals. Id. art. 2(4).

90 Theresa Walanabe, S. Korea Revises Disputed Labor Law Asia: Bill Offers Expanded UnionRights. Compromise is Likely to Ease Anger that Triggered Widespread Strikes, L.A. TIMES, Mar. 11,1997, at A9.

91 CHOI, supra note 3, at 5.9 DAVID TRUMAN, THE GOVERNMENTAL PROCESs 264 (1971).

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to shape the progression of labor relations because they have directlyinfluenced the lawmakers whereas workers were explicitly prohibited fromcollectively pursuing change. Several ramifications arise from thiscircumstance. The obvious ramification is that, because employers are notbanned from making political contributions and otherwise influencing policy,unions had no opportunity to counteract the damage that employers werewreaking on worker rights.

The ban on political activity also affected union structure and goals.Unions have organized at a grass roots level because attempts to organizelarge umbrella organizations resembled illicit political activity.9 3 Unionsfollowed the tenets of business, or economic, unionism. This means thatunions sought to attain purely economic, apolitical goals such as wageincreases or shorter work days.94 Unions' emphases on apolitical goals isexemplified by the fact that, until recently, they used strikes anddemonstrations to compel wage increases but never to change the nation'slabor laws. 95 Thus, unions have not influenced national labor policy because"the legislative process has provided labor with no means to wield influencewith regard to the basic labor laws. 96

Since unions have had no direct voice in the formation of labor policy,most of their strikes and demonstrations can be viewed as reactions inresponse to laws and policies that were passed without their input orsupport.97 Thus, the government somewhat contributed to Korea's notoriousmilitant labor dissidence by forcing unions to resort to strikes to effectuatechange. If the lift of the ban on political activity permits unions to engage inmeaningful political input, the country may see a notable decrease in theincidence of disruptive industrial action.

The lift of the ban on political activity seemed almost inevitable.Already, unions were beginning to orient themselves towards more politicalgoals rather than focusing entirely on narrow, economic goals. 98 Three

93 CHOI, supra note 3, at 93. Unions' political isolation is heightened by a law that prohibits thirdparties, such as church groups or student activists, from intervening in labor disputes. Labor Union Act, supranote 7, art. 12.

94 CHOI, supra note 3, at 107-11.95 See id. at 295. Unions recently struck over a law that displayed "arrogance and antagonism toward

just one side [promptingl a public fury and the biggest labor strikes in the nation's history." Teresa Watanabe,S. Korea Summit May Not Do Trick Asia: President Kim and Political Foes Meet in an Effort to EndLabor Unrest. A Key Union's Agreement to Any Accord Remains a Question Mark, L.A. TIMEs, Jan. 21,1997, at A14.

9 CHOI, supra note 3, at 256.9' Id. at 265.98 Koo, supra, note 32 at 156-67.

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reasons exist for unions' broadening of objectives. First, even though Koreanworkers have experienced substantial wage increases over the past decade, 99

the Korean workweek is long and accident rates for workplaces are very highcompared to other modem industrialized nations.10 0 Thus, to improve thequality of life within the workplace, unions had to pursue goals that lookedbeyond pure monetary compensation.

The second reason unions have shifted away from purely economicgoals is the increasing unionization of white collar workers who entered thelabor relations arena with a greater political agenda.' 0' The influx of whitecollar workers into unions also placed unions in the mainstream and helpedunions gain the support of Korea's growing middle class.'0 2 The greaterparticipation of middle class protestors in demonstrations also indicates that agreater portion of the Korean workforce is angered and frightened by thegovernment's business-friendly legislation.10 3

The third reason for greater political focus by unions is the relativelyhigh education of the Korean workforce. 104 The increase in education has ledto greater assertiveness and confidence by Korean employees and has largelycontributed to the development of a class consciousness. 0 5 Thus, workershave begun to see themselves as part of a larger struggle and have started toconcentrate on widespread change rather than purely immediate problems inindividual workplaces.

The relatively high education of Korean workers combined with theincreasing unionization of white collar sectors means that unions may becomeparticularly apt at influencing the political process. Now that the ban onpolitical activity has been lifted, workers may be able to mobilize and actuallyimpact politics. However, unions may still be somewhat hindered in theirefforts to change labor policy at the legislative level. As mentionedpreviously, unions are accustomed to organizing at the grass roots level. 10 6

99 From 1985 to 1995, Korean wages increased alnmst sevenfold, rising from $1.23 per hour inAmerican dollars to $7.40 per hour. Outlook; Labor: We're No. 13, U.S. NEWS & WORLD REP., SepL 23,1996, at 24.

'00 Alice H. Arnsden, Asia's Industrial Revolution, DISSENT, Summer 1993, at 324, 327.'0' Koo, supra note 32, at 157.102 You, supra note 26, at 200. See also Steven V. Brull & Catherine Keumhyun Lee, Why Seoul is

Seething: Koreans Want the Mismanaged Chaebol to Share the Economic Pain, Bus. WK., Jan 27, 1997,at 44 (participation of middle class protestors in demonstrations indicates that a greater portion of the Koreanworkforce is angered and frightened by the government's business-friendly legislation).

103 Brull & Lee,supra note 102, at 44.1 04 Kimsupra note 17, at 222.105 You, supra note 26, at 204.1o6 See supra text accompanying note 93.

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Although class consciousness is developing, most unions are strongest andmost vocal within the individual workplace. Although localized unions havesuccessfully banded together in strikes to create nationwide economic strife,more pervasive change may not occur unless unions are able to organizenationally and agree on an agenda that can be pursued through legislativechannels. The two legal umbrella organizations, the Federation of KoreanTrade Unions and the Korean Confederation of Trade Unions, 107 mustattempt to combine the efforts of their local member unions to effect realpolitical change.

B. Corruption Persists

Although the lift of the ban on political activity is a significant positivechange for labor unions, the persistence of the government-business nexusand the superior financial resources of business necessitate greater change ifunions are to affect the laws that govern them. The government-businessnexus is alive and well; one need only look into Korea's very recent past tofind examples of corruption arising from this collusive relationship. InAugust of 1996, two former presidents and several chaebol heads werecriminally prosecuted for numerous acts of corruption and bribery.10 8

Although the mere fact of prosecution denotes desirable change, manycommentators believe that the administration that investigated the corruptbusiness leaders did so merely to appease Korean citizens and that anypunishments rendered were merely symbolic. 109

The evidence suggests that the administration that conducted theprosecutions has also been involved in corruption. In February 1997, when alarge national steelmaker, Hanbo, went bankrupt, Korean citizens andinternational observers discovered that the nation's fourteenth largest chaebolhad been receiving loans from the government-operated bank long after itspotential for bankruptcy had become apparent to lenders." 0 Thegovernment's decision to finance the dying conglomerate was theconsequence of "corruption and cronyism" and demonstrated that the nation's

1 7 See supra note44.

log Catherine Keumhyun Lee, Unfinished Business. Kim Sends the Chaebol a Message, Bus. WK.,Sept 9, 1996, at 56. Among those punished were the chairmen of Samsung and Daewoo, two of Korea's fourlargest chaebols. Id.

'09 See id at 57.110 Michael Schuman, Corruption in South Korea Isn't Gone Yet: Hanbo Scandal Shows Kim's

Reform Falls Shy of Goals, WALL ST. J., Feb. 24, 1997, at A18. Koreans have dubbed the scandal"Hanbogate." Id.

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banks "pay more attention to their borrowers' political connections than totheir ability to repay.""' Thus, unions are entering the political game asinfants in relation to employers whose positions and influence are wellestablished.

C. The Current Law

The most recently enacted labor law represents another example ofemployers' advantage over unions in political matters. The law was passed ina covert pre-dawn legislative session excluding opposition members of theNational Assembly. 12 The law was the clear result of chaebols' lobbyingefforts. 113 It gave unions no immediate rights while making it easier foremployers to lay off workers. 114 Prior to passage of the law, employers hadto obtain court orders before they could lay off employees) 15 The law alsopermitted employers to increase the already lengthy work week and toreplace striking workers, a previously prohibited practice.116 In return, theban on political activity by unions was lifted 1 7 and unions were permitted toorganize on an industry-wide level," 8 but enactment of these provisions waspostponed for at lease three years." 9

Although the law was described as a "slap in the face to both its ownworkers and international public opinion,' 120 it did give unions theopportunity to demonstrate their indirect political power. After three weeks

" Mark L. Clifford & James Lin, Meltdown in Seoul: Hanbo "s Fall Shakes the System, Bus. WK.,Feb. 10, 1997, at 50.

112 Kevin Sullivan, Thousands of Strikers Demonstrate in Seoul; Workers Protest New Labor

Legislation, WASH. POST, Dec. 30, 1996, at A14.113 Catherine KeuhyUn Lee & Sheri Presso, Crunch Time for the Chaebol: Widespread Strikes

Could Thwart an Effort to Cut Costs, Bus. WK., Jan. 13, 1997, at 16. See also Sullivan, supra note 112, at

A14 ('Labor leaders see the bills as unfair collusion between the governmnt and the country's immenselypowerful corporations").

114 Ju-Yeon Kim, Seoul Police Loose Tear Gas on Protesting Workers, WASH. POST, Dec. 29, 1996,

at A25."'5 Michael Scluman & In Kyung Kim, South Korea Passes Watered-Down Labor Legislation, WALL.

ST. J., Mar. 11, 1997, at A19.116 Labor Unions Launch Nationwide Protest Strikes, Korea Herald, Dec. 27, 1996, available in 1996

WL 15360619.117 Id.

18 David Holley, S. Korean Strikes in Crucial Phase, Analysts Say Asia: President Kim Rejects

Unions' Demand to Scrap New Law Making it Easier to Lay Off Workers, L.A.TIMES, Jan. 7, 1997, at A12.119 Id.120 South Korean Workers Protest Law, Law Would Make It Easier to Have Layoffs in Asian

Country, CHARLESTON GAzETTE & DAILY MA.it (WV), Dec. 28, 1996, at P3A (statement made by labor

advisory group to the OECD).

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PACIFICRIM LAW& POLICYJOURNAL

of strikes and a three billion dollar loss to the national economy,' 2 ' thePresident repealed the bill and passed a new one that revoked the provisionmaking it easier to lay off employees and immediately lifted the ban onpolitical activity. 122

The repeal of the original bill was a significant victory for unions.However, the mere fact of repeal should not lead to the conclusion that thestrength of unions was the sole, or even the primary, reason that the business-friendly law was overturned. Pressure from the OECD was a major reasonbehind the law's abolition. Korea joined the OECD on October 11, 1996.123

Months before Korea's admission to the Organization, other OECD membernations expressed misgivings about Korea's labor laws' 24 since they provideworkers with comparatively few protections. 125 After Korea was admitted,the OECD placed continuous pressure on it to amend the troublesomeportions of its laws. 126 After the National Assembly passed the law inDecember of 1996, the head of the OECD's Trade Union AdvisoryCommittee asked the President for a veto. 127 After the President signed thebill into law, the OECD continued to express-its disapproval. 12

As the foregoing incident illustrates, international pressure can be avital force in ensuring that unions are accorded full rights in Korea. Merepressure from the unions would probably have been insufficient to turn overthe unpopular law. Unless the OECD or other international organizations,such as the International Labor Organization, 129 persistently intervene at thisjuncture, labor repression is likely to continue.

121 Watanabe, supra note 90, at A14.

'2

2 Id. The new law also legitimated the formerly outlawed Korean Confederation of Trade Unions. Seesupra note 44.

123 Tatsuji Nagata South Korea's OECD Membership Signals Its Growth, MAINICm DAILY NEWS,

Nov. 14, 1996, available in WESTLAW, Papersap Database. Korea was the second Asian nation to join theOECD; Japan has been a member since 1964. Id.

124 John Burton, Asia Pacific: South Korea Faces Bout of Labour Unrest, FIN. TIMEs, June 20, 1996,at4.

12 See OECD Economic Surveys 1995-1996: Korea, supra note 78, at 105-06.126 Labor Unions Launch Nationwide Protest Strikes, supra note 116.127 South Korean Workers Protest Law, Law Would Make It Easier to Have Layoffs in Asian

Country, supra note 120.12s S. Korea OKs Replacement for Unpopular Labor Law, CHI. TIUB., Mar. 11, 1997, at 9.129 Korea has been a member of the International Labor Organization ("ILO") since 1991 even though

the ILO's governing body deems several of Korea's labor laws to be in violation of fundamental rightscontained in thdLO's constitution. Dicker, supra note 2, at 204.

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V. SUGGESTIONS FOR CHANGE

As mentioned previously, the lift of the ban on political activityrepresents significant forward progression in Korea's labor laws. 130 However,for labor repression to be alleviated, administrative oversight of laborrelations must be lessened. This section discusses remedies to some of theproblematic provisions of the laws discussed in Section III. The solution isfairly simple: give the unions greater autonomy to conduct their affairs anddiminish the government's role in all stages of labor relations. This autonomycould be advanced through three changes.

Many internal union affairs now under direct administrative controlshould be placed beyond the scope of governmental authority. Reporting andinvestigation requirements 131 should cease once a union is certified and theadministrative authority should not be permitted to compel submission ofdocuments 132 absent substantiated allegations of wrongdoing by the union. Ifthe administrative authority is stripped of its power to scrutinize uniondocuments, it necessarily follows that it will no longer have the right tointerpret and unilaterally amend union by-laws. 133 These limitations onadministrative control are needed to secure unions' right to self-governinternal affairs.

Next, collective bargaining agreements should be treated like contractsbetween the employer and the union, not the employer, the union, and thestate. A collective bargaining agreement should not be subject toadministrative review unless a dispute arises under its terms and theagreement contains no machinery for dispute resolution, or the partiesdisagree on what procedures the agreement actually prescribes. The presentlaw, permitting the State to strike terms of the agreement, 134 infects thebargaining process at its primal stage. The State's one-sided interventioneradicates the employer's incentive to bargain seriously. Even if a concessionto labor does creep into the agreement, the employer may be saved by theState's erasure of the term. These consequences of the current laws haveprevented collective bargaining agreements from becoming tools of changewithin the workplace. Since the collective bargaining agreement is thedesirable end product of the union's collective strength, it is essential that

13 se' e supra text accompanying notes 89-107.131 Labor Union Act, supra note 7, arts. 13, 25.132 Id. art. 25.133 Id. art. 21.134 Id. art. 31(3).

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negotiations be conducted on equal footing with minimal impediment tocompromise.

When the collective bargaining process collapses, unions may resort tothe ultimate economic weapon: the strike. An effective strike willeconomically injure the employer thereby increasing the union's bargainingpower. Often, the timing of the strike will be a determinant in itseffectiveness. Since a union must forecast its intention to strike to the Stateand the employer ten days prior to taking action, 135 it is prevented from usingthe strike to its utmost advantage. The employer has ample time to instituteretaliatory measures which, though technically illegal, are unlikely to beprosecuted due to selective enforcement of the laws. 3 6 The employer'sopportunity to strategize before an impending strike removes the sting fromany legal strike. Thus, unions are barred from using collective bargaining andlegal economic action to further their goals.

Lastly, the State should actively urge unions and employers to utilizetheir own dispute resolution machinery. The State's dispute resolutionmachinery should only be used in case of default, i.e., when the parties fail toinclude their own procedures for dispute resolution in the collectivebargaining agreement. Employers will then be forced to address issuesinternally by an unbiased decision-maker or neutral mediator. The veryexistence of neutral dispute resolution mechanisms may deter employers fromtaking actions that would clearly violate provisions of the collectivebargaining agreement or constitute unfair labor practices. Unfortunately, theState's present intervention has created an atmosphere where employers donot portend punishment for wrongdoing and unions do not enter the disputeresolution process in anticipation of victory.

VI. CONCLUSION

South Korea's economic growth since the Korean War has beenphenomenal. The so-called "economic miracle"' would probably not havebeen possible without the close cooperation of business and government.Korea's regard for fundamental human rights has also grown, but this is afairly recent trend. Most of the nation's post-war history is marked by violentlabor repression and subversion of individual workers' basic rights. The

" Labor Dispute Mediation Act, supra note 8, art. 16.

136 See Kim, supra note 36.137 OGLE, supra note 3.

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current laws arose out of this period of labor suppression. These laws notonly reflect the power disparities between employers and workers but alsoperpetuate the imbalanced system. Until the bias is removed from the laborlaws, unions will be barred from taking giant strides to improve employmentconditions and must instead achieve their workplace gains by Lilliputiansteps.

Now that unions are permitted to engage in political activity, they havethe opportunity to directly influence labor legislation. The previouslypolitically weak organizations would be able to use this new power toworkers' tactical advantage. In addition, the ILO and the OECD shouldcontinue to pressure Korea into fulfilling workers' rights to unionize andparticipate in collective action. A primary goal of unions and internationalorganizations should be to urge Korean government to leave labor relations tothe parties involved. Many of the problems inherent in the current lawswould be eliminated if the government relinquished its extensive control overlabor relations. Even though corruption and business-government collusioncannot be eradicated overnight, their presence need not infect labor affairs.The government should exit the arena of labor affairs and permit unions andemployers to negotiate on even ground. This can be achieved by shearing thepresent laws of many of their administrative oversight provisions andretaining government intervention only as a means of last resort.

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